How many new businesses are being started in the United States?
The answer depends on what you mean by “started.”
In August 2026, Americans submitted 531,728 seasonally adjusted business applications, according to the U.S. Census Bureau’s Business Formation Statistics.
But that does not mean 531,728 new businesses opened during August.
The Census Bureau separately projected that 28,501 employer businesses would form within four quarters from the August 2026 application cohort.
Understanding that distinction is essential when interpreting U.S. business formation statistics.
This StartupWerx guide explains what current Census data tell us about business applications, employer business formations and entrepreneurial activity in the United States.
Last reviewed: September 2026
Data note: Business applications, high-propensity business applications and business formations measure different stages of business creation. StartupWerx keeps these measures separate throughout this guide rather than treating every EIN application as a newly formed operating business.
Business Formation Statistics 2026 at a Glance
| Statistic | Figure | Reference Period / Source |
|---|---|---|
| U.S. business applications | 531,728 | August 2026, seasonally adjusted |
| Monthly change in business applications | -7.8% | August vs. July 2026 |
| Projected employer formations within 4 quarters | 28,501 | August 2026 application cohort |
| Monthly change in projected formations | -4.6% | August vs. July 2026 |
| Business Formation Statistics monthly series begins | July 2004 | U.S. Census Bureau |
| Business application measures published monthly | 4 | BA, HBA, WBA, CBA |
| Formation measurement windows | 4 and 8 quarters | U.S. Census Bureau BFS |
| Monthly geographic availability | National, regional and state | Census BFS |
| County business-application data | Annual | Census BFS |
| Latest annual county data available | 2005–2025 | Released June 2026 |
Primary source: U.S. Census Bureau — Business Formation Statistics
How Many Business Applications Are Being Filed in 2026?
The Census Bureau reported:
531,728 seasonally adjusted U.S. business applications in August 2026.
That represented a:
7.8% decrease from July 2026.
Business applications are one of the fastest available measures of entrepreneurial activity in the United States.
The Census Business Formation Statistics are based primarily on applications for Employer Identification Numbers submitted through IRS Form SS-4.
However, not every EIN application becomes part of the Census business-application series, and not every business application ultimately becomes an employer business.
That makes the definition important.
What Is a Business Application?
The Census Bureau defines a business application as:
An application for an Employer Identification Number made predominantly for business purposes.
The core Business Applications series is commonly abbreviated:
BA
Census filters the underlying EIN applications to create the series.
For example, the Business Applications series excludes certain applications involving:
- Tax liens
- Estates
- Trusts
- Certain financial filings
- Applications without appropriate geographic information
- Certain industries with low transition rates to employer businesses
This means the Business Applications figure should not be interpreted as simply the total number of EINs issued by the IRS.
It is a Census statistical measure designed to track business-initiation activity.
A Business Application Is Not the Same as a New Business
This is the most important distinction on this page.
Business application ≠ business formation.
In August 2026:
531,728 business applications were filed.
Census projected:
28,501 employer businesses would form within four quarters from that application cohort.
Those numbers measure different stages of the entrepreneurial process.
The 531,728 figure represents qualifying business applications during August.
The 28,501 figure is a forward-looking projection of employer businesses expected to emerge from those August applications within four quarters.
It is not an estimate that 28,501 businesses opened during August.
Business Applications vs. Business Formations
| Measure | What It Measures |
|---|---|
| Business Applications (BA) | Qualifying EIN applications made predominantly for business purposes |
| High-Propensity Business Applications (HBA) | Applications with characteristics associated with a higher likelihood of becoming employer businesses |
| Business Applications with Planned Wages (WBA) | High-propensity applications indicating a planned first date for paying wages |
| Business Applications from Corporations (CBA) | High-propensity applications from corporations or personal service corporations |
| Business Formations (BF) | Employer businesses that actually emerge from earlier business applications |
| Projected Business Formations (PBF) | Estimated employer businesses expected to emerge from an application cohort |
Keeping these categories separate provides a much clearer picture of business creation.
What Are High-Propensity Business Applications?
Not all business applications have the same likelihood of becoming businesses with employees.
The Census Bureau therefore publishes a measure called:
High-Propensity Business Applications (HBA).
These are applications with characteristics associated with a relatively high probability of becoming businesses with payroll.
Census identifies high-propensity applications using characteristics reported on IRS Form SS-4.
These can include applications that:
- Indicate plans to hire employees
- Provide a first wages-paid date
- Come from certain corporate entities
- Operate in industries historically associated with higher rates of employer-business formation
High-propensity applications provide another way to examine entrepreneurial activity beyond the overall number of business applications.
But they still are applications, not confirmed business formations.
What Are Business Applications With Planned Wages?
A narrower category is:
Business Applications with Planned Wages (WBA).
These are high-propensity applications that provide a planned date for paying wages.
That information is significant because a planned wages date is associated with a higher likelihood of transitioning into a business with payroll.
The measure can therefore provide insight into prospective employer-business activity.
Again, it should not be interpreted as a count of businesses already employing people.
What Are Business Applications From Corporations?
Census also publishes:
Business Applications from Corporations (CBA).
These are high-propensity applications from corporations or personal service corporations based on the legal form of organization reported on IRS Form SS-4.
Together, BA, HBA, WBA and CBA provide different views of the business-application pipeline.
How Does Census Determine When a Business Has Formed?
For purposes of the Business Formation Statistics, Census focuses on the creation of employer businesses.
A business formation occurs when a business application transitions into an employer business with payroll.
Census identifies employer formations using administrative data that include the first appearance of payroll tax liability associated with the business.
This is important because “starting a business” can mean different things in everyday language.
Someone might consider a business started when they:
- Choose a business idea
- Register an LLC
- Obtain an EIN
- Open a bank account
- Make the first sale
- Hire the first employee
The Census BFS formation measure uses a specific statistical definition centered on becoming an employer business.
It therefore should not be interpreted as measuring every type of new business.
Millions of U.S. businesses operate without employees.
What Are Projected Business Formations?
Recent business applications haven’t existed long enough for Census to observe whether they ultimately become employer businesses.
For that reason, Census produces:
Projected Business Formations.
For August 2026, Census projected:
28,501 employer businesses would form within four quarters from the August application cohort.
That was:
4.6% lower than the analogous projection for July 2026.
The four-quarter projection asks, in effect:
How many employer businesses are expected to emerge within approximately one year from the business applications filed during this month?
Census also produces formation measures using an eight-quarter window.
These measures provide a longer period for applications to transition into employer businesses.
Why Business Formation Data Changes Over Time
Business Formation Statistics are not static.
Census updates its data as more information becomes available.
The formation series rely on administrative records, including information from the Census Business Register and Longitudinal Business Database.
Actual formation data can therefore be revised as Census obtains updated information.
Seasonal adjustment can also produce revisions.
During updates, Census may:
- Update business formation records
- Recompute seasonal factors
- Revise industry classifications
- Incorporate improved administrative information
- Update methodological definitions
This is one reason StartupWerx identifies the reference period and source rather than treating every number as permanent.
How Often Are Business Formation Statistics Updated?
Census publishes Business Formation Statistics at several frequencies and geographic levels.
Monthly Data
Monthly BFS data begin in:
July 2004.
The monthly dataset includes four business-application series:
- Business Applications
- High-Propensity Business Applications
- Business Applications with Planned Wages
- Business Applications from Corporations
It also includes actual and projected business-formation measures.
Monthly data are available nationally, regionally and by state.
Census generally releases monthly BFS shortly after the observed month ends.
Weekly Estimates
Census also produces weekly business-application estimates.
Weekly estimates begin in:
2006.
Beginning in August 2024, Census stopped publishing weekly estimates as separate standalone weekly releases.
Weekly estimates are now released as part of the monthly Business Formation Statistics publication.
Business-formation series are not produced weekly.
Annual County Data
Census also publishes annual business-application data by county.
In June 2026, Census released county data covering:
2005 through 2025.
This makes the BFS useful not only for national analysis but also for examining entrepreneurship at more local levels.
Why Business Applications Matter
Business applications provide an early signal of entrepreneurial activity.
Traditional economic datasets can take months or years to fully reflect changes in business creation.
EIN applications occur much earlier in the process.
That makes Business Formation Statistics useful for identifying changes in entrepreneurial activity relatively quickly.
Business applications can help researchers examine:
- Changes in entrepreneurship
- Geographic patterns
- Industry trends
- Economic shocks
- Business-cycle changes
- Potential future employer formation
They are particularly useful when interpreted as a pipeline rather than a final count of businesses.
Business Formation Activity Remains Historically Important
The Census Business Formation Statistics series begins in July 2004, providing more than two decades of monthly data for comparing current entrepreneurial activity with earlier periods.
The long-term series shows that business applications rose sharply during and after 2020 compared with the years immediately before the pandemic.
Application levels have moved up and down since that initial surge, but the shift established a higher level of business-application activity than was typical during much of the pre-2020 period.
That makes an important distinction necessary:
The post-2020 increase represents an increase in business applications—not an equivalent increase in operating employer businesses.
Some applications ultimately become employer businesses.
Others become nonemployer businesses.
Some never become operating businesses at all.
For that reason, StartupWerx uses the Census Business Applications series to measure business-initiation activity, not to claim that every application represents a successfully launched company.
Why 2020 Changed the Business Formation Trend
The sharp change in business applications beginning in 2020 attracted significant attention from economists and policymakers.
Business creation can respond to many factors, including:
- Changes in employment
- New consumer behavior
- Technology
- Ecommerce
- Remote work
- Industry disruption
- New market opportunities
- Changes in how people earn income
The Census Business Formation Statistics measure the resulting application activity but do not, by themselves, establish why an individual entrepreneur decided to start a business.
That distinction is important.
The data can tell us when business-initiation activity changed.
Additional research is required to determine why it changed.
Business Formation Activity Varies by State
Entrepreneurial activity is not evenly distributed across the United States.
The Census Bureau publishes monthly Business Formation Statistics for:
- The United States
- Census regions
- Individual states and the District of Columbia
State data include the same major business-application and formation concepts available nationally.
This allows researchers to compare:
- Business Applications
- High-Propensity Business Applications
- Applications with Planned Wages
- Corporate applications
- Actual employer formations
- Projected employer formations
But raw application totals should be interpreted carefully.
A large state will often generate more applications simply because it has more residents and businesses.
For example, comparing the raw number of applications in two states does not necessarily tell you which state has the stronger entrepreneurial environment.
A more meaningful state analysis may consider:
- Population
- Labor force
- Existing business population
- Industry composition
- Historical application levels
- Employer-formation rates
State Business Applications Are Not a State Business Ranking
StartupWerx does not interpret the state with the most applications as automatically being the “best state to start a business.”
Business owners also need to consider:
- Customers
- Taxes
- Filing costs
- Annual fees
- Licensing requirements
- Labor availability
- Real estate costs
- Insurance
- Industry regulations
- Access to suppliers
- Financing
- Where the owner actually operates
Business Formation Statistics measure entrepreneurial activity.
They do not measure overall business attractiveness.
For entrepreneurs comparing legal formation costs, see StartupWerx’s LLC Formation Costs by State.
County Data Show How Local Business Activity Differs
Census also publishes annual Business Applications data at the county level.
The latest county release, published in June 2026, covers:
2005 through 2025.
County-level data make it possible to study business-initiation activity at a much more local level than national or state statistics.
That can be useful when evaluating:
- Metropolitan entrepreneurship
- Local economic changes
- Regional business clusters
- Changes in business activity over time
- Differences between urban and rural areas
But county Business Applications still measure qualifying applications rather than successful businesses.
A county with rapidly increasing applications may be experiencing growing entrepreneurial interest.
Additional data would be needed to determine how many of those businesses survive, grow, hire employees or generate significant revenue.
Which Industries Generate Business Applications?
Business formation activity also varies substantially by industry.
Census publishes Business Application data classified using the North American Industry Classification System (NAICS).
The latest industry-detailed BFS data currently extend through 2025.
That distinction matters:
2025 industry data should not be presented as August 2026 industry activity.
Industry classifications allow researchers to examine application activity across sectors such as:
- Retail Trade
- Professional, Scientific and Technical Services
- Construction
- Transportation and Warehousing
- Accommodation and Food Services
- Health Care and Social Assistance
- Administrative and Support Services
- Finance and Insurance
- Real Estate
- Information
- Manufacturing
- Educational Services
- Arts, Entertainment and Recreation
- Other Services
Census notes that industry classifications rely on available administrative information and classification methods and may be revised as those methods improve.
The 2020 Surge Was Not Evenly Distributed Across Industries
One notable characteristic of the post-2020 business-application increase was that the change differed across industries.
Historical Census analysis showed especially visible increases in sectors such as retail during the 2020 application surge.
That occurred during a period of major changes in ecommerce and consumer purchasing behavior.
However, the Business Formation Statistics alone do not establish that those changes caused the increase.
Industry application data should also be interpreted the same way as national application statistics:
More applications do not automatically mean the same number of successful new businesses.
Industries differ in:
- Startup costs
- Capital requirements
- Licensing
- Hiring requirements
- Time to launch
- Business survival
- Ability to operate without employees
A professional-services business, for example, may require relatively little capital to begin operating.
A restaurant may require substantial equipment, permits, facilities and employees before opening.
Those differences affect how business applications translate into operating businesses.
Applications With Higher Employer Potential Matter
The overall Business Applications number provides the broadest measure of business-initiation activity.
But entrepreneurs and researchers interested specifically in future employers may want to pay particular attention to:
High-Propensity Business Applications.
These applications have characteristics that Census associates with a higher probability of becoming businesses with payroll.
Census identifies high-propensity applications using factors including:
- Corporate status
- Indications that employees will be hired
- A planned first wages-paid date
- Certain industry classifications historically associated with employer formation
This doesn’t guarantee that an application will become an employer business.
It provides a more targeted indicator than total Business Applications alone.
Why This Matters
Consider two hypothetical months.
Month A
- 500,000 total Business Applications
- 150,000 High-Propensity Business Applications
Month B
- 500,000 total Business Applications
- 200,000 High-Propensity Business Applications
The total application count is identical.
But the composition of those applications is different.
That is why a complete picture of entrepreneurship requires looking beyond the headline Business Applications number.
The StartupWerx Business Formation Pipeline
A useful way to understand the Census data is to think of business creation as a progression.
Stage 1: Business Intent
Someone decides to pursue a business opportunity.
This stage generally isn’t directly measured by BFS.
Stage 2: Business Application
The entrepreneur submits an EIN application that meets the Census definition of a Business Application.
This activity appears in:
BA
Stage 3: Higher Employer Potential
Some applications have characteristics associated with a greater likelihood of developing payroll.
These can appear in:
HBA
Some high-propensity applicants also indicate plans to pay wages:
WBA
Stage 4: Employer Business Formation
Some applications eventually become businesses with payroll.
These appear in the Census business-formation series.
The progression can be summarized as:
Business Intent → Business Application → High-Propensity Application → Employer Formation
Not every entrepreneur follows every stage.
For example, a solo consultant may form and operate a legitimate business without ever hiring an employee.
The model is therefore most useful for understanding the Census employer-business formation process rather than every possible entrepreneurial path.
Business Formation Is a Funnel, Not a Single Event
In practical terms, someone may move through several stages:
Idea → Application → Legal Formation → Launch → Revenue → Hiring → Employer Business
Not every business follows that sequence exactly.
Some businesses never hire employees.
Others hire almost immediately.
Some entrepreneurs obtain an EIN before making a sale.
Others legally form an entity before obtaining an EIN.
Some applications never become active businesses.
That makes it misleading to look for one government statistic representing every business “started” in America.
Different datasets measure different points in the process.
StartupWerx Business Formation Measurement Framework
StartupWerx separates business creation into four useful measurement categories.
| Stage | What It Tells Us | Example Measure |
|---|---|---|
| Entrepreneurial Intent | Someone is taking steps toward business creation | Business Applications |
| Employer Potential | Application has characteristics associated with future payroll | High-Propensity Business Applications |
| Legal Formation | Entrepreneur establishes a legal business entity | State formation records |
| Employer Formation | Business begins payroll activity | Census Business Formations |
These measures answer different questions.
Business Applications Answer:
How much business-initiation activity is occurring?
High-Propensity Applications Answer:
How much application activity has characteristics associated with future employer businesses?
State Formation Records Answer:
How many legal entities are being created under state law?
Census Business Formations Answer:
How many earlier applications are becoming employer businesses?
Combining those concepts without distinguishing them can produce misleading claims about entrepreneurship.
Does Getting an EIN Mean You Started a Business?
Not necessarily.
An EIN is a federal tax identification number issued by the IRS.
Businesses may obtain EINs for numerous legitimate reasons.
The Census Bureau uses qualifying EIN applications as an early indicator of business initiation, but obtaining an EIN alone does not establish that a business:
- Began operating
- Generated revenue
- Hired employees
- Became profitable
- Survived
Similarly, some sole proprietors without employees may be able to use the owner’s Social Security Number for certain federal tax purposes rather than obtaining an EIN.
That means EIN-based statistics are extremely useful but do not capture every form of entrepreneurship.
Does Forming an LLC Count as a Census Business Formation?
Not necessarily.
Creating an LLC and becoming a Census-defined employer business are different events.
An entrepreneur might:
- Form an LLC.
- Obtain an EIN.
- Open a business bank account.
- Begin selling.
- Operate alone for several years.
That business could be fully operating without yet meeting the Census BFS definition of an employer business formation.
Legal business formation and economic employer formation are therefore different concepts.
A newly formed LLC may operate successfully for years without employees.
That business is economically real even if it never appears as an employer formation in the Census BFS formation series.
This distinction matters because the U.S. small-business economy includes millions of nonemployer businesses.
StartupWerx examines that broader population in Small Business Statistics 2026.
Business Formation Is Only the Beginning
Submitting an application or legally forming a company doesn’t guarantee that the business will succeed.
A founder still needs to determine:
- Who the customer is
- What problem the business solves
- How much customers will pay
- What the business costs to launch
- How customers will be acquired
- Which licenses and permits are required
- How much operating capital is needed
- Whether the economics can support the business
Startup costs can vary dramatically depending on the business model.
StartupWerx’s Cost to Start a Business in 2026 provides a framework for estimating formation costs, launch assets, equipment, customer acquisition and operating reserves.
What the Data Can—and Cannot—Tell You About Starting a Business
Business Formation Statistics are useful for understanding large-scale entrepreneurial activity.
They can show:
- Whether application activity is rising or falling
- Geographic differences
- Changes over time
- Industry patterns
- Employer-business formation
- The composition of business applications
They cannot tell you whether a specific business idea will succeed.
For an individual entrepreneur, success depends on factors the national BFS cannot measure for you, including:
- Customer demand
- Pricing
- Competition
- Startup capital
- Operating costs
- Location
- Execution
- Customer acquisition
- Cash flow
That is why formation data should be used as market context, not as a substitute for business planning.
How Entrepreneurs Can Use Business Formation Data
For someone considering starting a business, the most useful question isn’t:
“Are lots of other people starting businesses?”
It is:
“What does the broader formation environment tell me, and what do I still need to validate for my own business?”
Business formation data can help identify:
Changes in Entrepreneurial Activity
A sustained increase in applications can indicate increased interest in entrepreneurship.
Geographic Patterns
State and county data can help identify where application activity is changing.
Industry Changes
Industry data can show which sectors are experiencing changes in application activity.
Employer Potential
High-Propensity Business Applications provide additional information about applications associated with future payroll businesses.
But none of these replace direct market research.
The decision to start a business should depend on the economics of the specific opportunity.
The Bigger Picture: Millions of Businesses Begin Small
The broader StartupWerx data series puts Business Formation Statistics into context.
The United States has more than 36 million small businesses, and the overwhelming majority have no paid employees.
That means entrepreneurship includes much more than venture-backed startups or companies immediately hiring teams.
A business can begin as:
- One consultant
- One contractor
- One ecommerce seller
- One creator
- One tradesperson
- One professional
- One service provider
and develop from there.
For many entrepreneurs, legal formation is one of the first concrete steps in turning that activity into an organized business.
The national formation statistics show the scale of entrepreneurial activity.
The individual opportunity determines whether joining it makes sense.
Ready to Turn Your Business Idea Into a Business?
Researching business formation trends can help you understand the broader entrepreneurial environment. When you’re ready to make your own business official, StartupWerx can help you move from planning to formation.
Frequently Asked Questions
How many new businesses are started each month in the United States?
There isn’t one statistic that represents every new business started.
The Census Bureau reported 531,728 seasonally adjusted business applications in August 2026.
However, a business application is not the same as an operating business or employer business formation.
For the August 2026 application cohort, Census projected 28,501 employer businesses would form within four quarters.
How many business applications were filed in August 2026?
The Census Bureau reported 531,728 seasonally adjusted business applications in August 2026.
That was 7.8% lower than July 2026.
How many businesses are projected to form from August 2026 applications?
Census projected that 28,501 employer businesses with payroll tax liabilities would form within four quarters from the August 2026 business-application cohort.
That was 4.6% lower than the comparable projection for July 2026.
What is a business application?
In the Census Business Formation Statistics, a business application is an EIN application made predominantly for business purposes and included within the BFS statistical universe.
It is not the same thing as an operating business.
What is a high-propensity business application?
A High-Propensity Business Application is a business application with characteristics associated with a relatively high probability of becoming a business with payroll.
Census identifies these applications using information from IRS Form SS-4.
Does applying for an EIN mean a business has officially started?
No.
Obtaining an EIN is an important administrative step for many businesses, but it does not establish that a business has begun operating, generated revenue or hired employees.
What does Census consider a business formation?
The Census Business Formation Statistics define a business formation as the formation of an employer, or wage-paying, business from a business application.
Census identifies these formations using administrative payroll information.
Does forming an LLC count as a Census business formation?
Not automatically.
Legal entity formation and the Census employer-business formation measure are different concepts.
An LLC can legally exist and operate without employees and therefore may not meet the BFS employer-formation definition.
How far back do Census Business Formation Statistics go?
Monthly Business Formation Statistics begin in July 2004.
Weekly business-application estimates begin in 2006.
Are business formation statistics available by state?
Yes.
Census publishes monthly Business Formation Statistics at the national, regional and state levels.
Annual Business Applications data are also available at the county level.
Sources and Methodology
StartupWerx built this guide primarily from the U.S. Census Bureau’s Business Formation Statistics.
Primary Sources
- U.S. Census Bureau — Current Business Formation Statistics
- U.S. Census Bureau — Business Formation Statistics Data Tables
- U.S. Census Bureau — Business Formation Statistics Definitions
- U.S. Census Bureau — About the Business Formation Statistics Data
- U.S. Census Bureau — Business Formation Statistics Methodology
- U.S. Census Bureau — Business Formation Statistics FAQs
- U.S. Census Bureau — Annual Business Applications by County
- U.S. Census Bureau — Business Formation Statistics by Industry
StartupWerx Methodology
When interpreting business formation statistics, StartupWerx distinguishes among:
- EIN applications — applications for federal tax identification numbers.
- Business Applications (BA) — EIN applications meeting the Census BFS definition for business purposes.
- High-Propensity Business Applications (HBA) — applications with characteristics associated with a greater likelihood of becoming employer businesses.
- Business Applications with Planned Wages (WBA) — high-propensity applications indicating a planned first wages-paid date.
- Business Applications from Corporations (CBA) — qualifying high-propensity applications from corporations or personal service corporations.
- Business Formations (BF) — employer businesses observed to emerge from earlier applications.
- Projected Business Formations (PBF) — estimated employer businesses expected to emerge from an application cohort.
StartupWerx does not treat these measures as interchangeable.
The August 2026 statistics on this page are seasonally adjusted unless otherwise identified.
Industry-specific data are identified separately because the latest detailed industry series currently extends through 2025.
Census may revise historical BFS data as administrative information, seasonal factors, industry classifications and formation records are updated.
Continue Building Your Business
Business formation statistics show what is happening across the broader U.S. entrepreneurial economy.
Starting your own business requires turning an idea into a specific plan.
StartupWerx’s Form, Manage, and Grow a Small Business guide provides a broader roadmap.
Continue with:
- Small Business Statistics 2026
- AI for Small Business Statistics 2026
- Cost to Start a Business in 2026
- LLC Formation Costs by State
- How to Start an LLC
Ready to Start Your Business?
Understanding national formation trends can help put entrepreneurship in context. When you’re ready to turn your idea into an official business, StartupWerx can help you take the next step.
StartupWerx helps entrepreneurs move from business idea to formation with practical guidance and tools designed to simplify the process.
Still Exploring Business Ideas?
You don’t need to have every detail figured out before exploring your options.
Use StartupWerx to explore business ideas and find opportunities that fit your interests, experience and goals.